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Netflix Could Be in a Better Position Than You Think

And you probably don't have anything to worry about

By Jon Bitner Jon Bitner North Central College Jon Bitner is a freelance writer who focuses on topics related to technology, science, and consumer electronics lifewire's editorial guidelines Published on July 28, 2022 02:00PM EDT Fact checked by Jerri Ledford Fact checked by Jerri Ledford Western Kentucky University Gulf Coast Community College Jerri L. Ledford has been writing, editing, and fact-checking tech stories since 1994. Her work has appeared in Computerworld, PC Magazine, Information Today, and many others. lifewire's fact checking process Tweet Share Email Tweet Share Email Streaming Mobile Phones Internet & Security Computers & Tablets Smart Life Home Theater & Entertainment Software & Apps Social Media Streaming Gaming Netflix recently announced the loss of nearly one million subscribers.It’s also cracking down on password sharing and developing an ad-supported plan.Despite these changes, members shouldn’t be too worried about Netflix’s future. Simpson33 / Getty Images Netflix has been going through some tough times lately, but subscribers shouldn’t be overly concerned about the platform—at least not yet. No matter how you cut it, Netflix is no longer the streaming powerhouse it was just a few years ago. It’s hemorrhaging subscribers, cracking down on password-sharing households, and is even planning to introduce an ad-supported tier, something that was unthinkable in 2020. Netflix is definitely feeling the pressure of a diversified marketplace and rivals such as Hulu and Amazon Prime, but there’s no reason for current subscribers to abandon ship just yet. "No, subscribers should not be worried," Jason Ruiz, an associate professor at Notre Dame and a Netflix expert, told Lifewire in an email. "Netflix is the global leader in streaming television and isn’t going anywhere just yet. We might see a shift in programming or distribution deals down the road, but I think that Netflix’s place in the streaming hierarchy is secure for now."

Don t Be Scared by the Loss of Subscribers

Legions of members have already been spooked by the latest developments at Netflix, as the platform lost 970,000 members in the second quarter of 2022. That’s a staggering number, but it’s something Netflix was expecting. In fact, the loss of subscribers was less dramatic than anticipated. "Q2 was better-than-expected on membership growth," reads the Netflix shareholder letter from July 19. "We slightly under-forecasted global paid net adds in Q2 (-1.0 million vs. -2.0 million forecast)." A lot of younger viewers came of age after the demise of broadcast TV and have never [had] to watch TV ads. Benji-Sales, an independent gaming analyst, said on Twitter that the “company is still facing challenges, but [this] is a positive sign.” The shareholder letter says the company is in a "position of strength" and will seek to "improve its core service" throughout 2022. Netflix stock actually rose after announcing its membership losses—which is a good sign of its financial strength and staying power.

The Password Sharing Problem

Declining subscriber numbers might not concern the average viewer, but the password-sharing crackdown is a different story. The company is experimenting with unique password-sharing strategies in select regions, such as letting members add an additional household to their account for an extra $2.99/month. It's unclear how this password crackdown will manifest in the US in 2023, but Ruiz thinks it’ll be something that has an impact on subscribers and their wallets. "I do think it will affect us on the consumer end. The company used to joke about password sharing, but it’s time for them to get serious about what it’s actually costing them. On the consumer side, we will all need to decide how valuable Netflix is to us. Lots of people who have been watching Netflix for years on a ‘borrowed’ account will need to decide if they want to pay. This also relates to the programming issues, as a lack of buzzy original shows will discourage many from pulling out their wallets in order to keep watching." Chesnot / Getty Images Netflix would be wise to announce the arrival of password sharing alongside a strong lineup of new programming. This could entice members who are on the fence to continue paying for the service, although pricing would still be a significant factor. So if you see a bunch of great shows revealed for next year, be prepared for an unfortunate follow-up announcement. For now, however, it’s business as usual for US subscribers.

Ads on Netflix Are a Wild Card

Nobody likes ads, but bringing them to Netflix might benefit some members. As subscription costs continue to rise (a Netflix Premium Plan now runs $20/month), frugal viewers might seek alternatives that are easier on their wallets. Netflix announced earlier this summer that the upcoming ad-supported tier will be "lower priced" than its current plans, although it stopped short of offering a specific number. If that number is radically lower than its current options, it could lure back lapsed customers. Ads may not have been in Netflix’s original plans, but if they’re done right, they’ll be a big win for the streaming giant and a portion of its community. But if they’re done wrong, viewers will let Netflix know. "Ads seem like the next logical step to me," Ruiz told Lifewire. "Netflix will gain from ads, but it will also cost them, as many consumers can no longer tolerate watching ads. A lot of younger viewers came of age after the demise of broadcast TV and have never [had] to watch TV ads. Some might be willing to pay more to not see them. Others will throw in the towel and walk away from Netflix." Was this page helpful? Thanks for letting us know! Get the Latest Tech News Delivered Every Day Subscribe Tell us why! Other Not enough details Hard to understand Submit More from Lifewire All About the Netflix Streaming Service The 10 Best Ways to Watch Movies With Friends Online How to Get Netflix for Free How to Use the Netflix Speed Test Where to Watch Friends Online How to Use the Netflix DVD Rental Program Hulu vs. Sling: Which Live TV Service is Best? How to Use Amazon Prime Video Crunchyroll: What It Is and How to Watch Anime on It How to Connect Netflix to TV How to Download Netflix Movies on Laptop How Many People Can Watch Netflix at Once? How to Get Netflix on a Non-Smart TV Twitch Subscriptions: What They Are and How They Work How to Get a Netflix Student Discount 44 Apps for Watching TV on Your iPhone Newsletter Sign Up Newsletter Sign Up Newsletter Sign Up Newsletter Sign Up Newsletter Sign Up By clicking “Accept All Cookies”, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts. Cookies Settings Accept All Cookies